Correlation Between Sound Shore and Bbh Intermediate
Can any of the company-specific risk be diversified away by investing in both Sound Shore and Bbh Intermediate at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sound Shore and Bbh Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sound Shore Fund and Bbh Intermediate Municipal, you can compare the effects of market volatilities on Sound Shore and Bbh Intermediate and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sound Shore with a short position of Bbh Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sound Shore and Bbh Intermediate.
Diversification Opportunities for Sound Shore and Bbh Intermediate
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sound and Bbh is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sound Shore Fund and Bbh Intermediate Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bbh Intermediate Mun and Sound Shore is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sound Shore Fund are associated (or correlated) with Bbh Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bbh Intermediate Mun has no effect on the direction of Sound Shore i.e., Sound Shore and Bbh Intermediate go up and down completely randomly.
Pair Corralation between Sound Shore and Bbh Intermediate
Assuming the 90 days horizon Sound Shore Fund is expected to generate 3.04 times more return on investment than Bbh Intermediate. However, Sound Shore is 3.04 times more volatile than Bbh Intermediate Municipal. It trades about 0.29 of its potential returns per unit of risk. Bbh Intermediate Municipal is currently generating about 0.13 per unit of risk. If you would invest 4,764 in Sound Shore Fund on August 29, 2024 and sell it today you would earn a total of 241.00 from holding Sound Shore Fund or generate 5.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sound Shore Fund vs. Bbh Intermediate Municipal
Performance |
| Timeline |
| Sound Shore Fund |
| Bbh Intermediate Mun |
Sound Shore and Bbh Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sound Shore and Bbh Intermediate
The main advantage of trading using opposite Sound Shore and Bbh Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sound Shore position performs unexpectedly, Bbh Intermediate can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Bbh Intermediate will offset losses from the drop in Bbh Intermediate's long position.| Sound Shore vs. Bbh Intermediate Municipal | Sound Shore vs. Calamos Dynamic Convertible | Sound Shore vs. Vanguard High Yield Tax Exempt | Sound Shore vs. Blrc Sgy Mnp |
| Bbh Intermediate vs. HUMANA INC | Bbh Intermediate vs. Aquagold International | Bbh Intermediate vs. Barloworld Ltd ADR | Bbh Intermediate vs. Morningstar Unconstrained Allocation |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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